アラビアン・ジャーナル・オブ・ビジネス・アンド・マネジメント・レビュー

How Working Capital Affects the Profitability of Commercial Banks: Case of Afriland Cameroon

Abstract

Serge Piabuo Mandiefe

This study seeks to assess the effect of working capital management on the profitability of Afriland First Bank Cameroon. Time series data from 2002 to 2013 was extracted from the financial statement of the bank, Correlation analysis and ordinary least square regression was used to determine how working capital affect profitability. The findings of this study show that working capital management effectively influences the performance of Afriland First Bank. The analysis show that customer deposits, the size of the bank, outstanding expenditure and return on assets all have a positive impact on bank profitability and are statistically significant, however, an increase in reserves leads to a reduction of profitability while other factors such as leverage have a positive effect on bank profitability.